Licensing reform bills will benefit Virginia workers
Amid ongoing worker shortages, a newly signed bipartisan reform targets one of Virginia’s largest obstacles to economic opportunity: occupational licensing. Affecting more than one-fifth of the state’s entire workforce, Virginia’s thicket of licensing laws costs the state more than $5.4 billion each year. Little wonder then that for every 100 open job positions, Virginia only has 54 workers available.
Adding insult to injury, workers who were already licensed in another state still had to complete redundant courses and exams to become licensed in Virginia. Of course, workers don’t suddenly lose their years of experience when they cross state lines. But Virginia’s licensing boards often treated them like they did.
Now Virginia will recognize licenses issued by agencies and boards from out-of-state. Signed by Gov. Glenn Youngkin on
March 3 in the governor’s first official bill signing ceremony of the year, House Bill 2180/Senate Bill 1213 will apply to almost all non-health licenses, covering 85 different occupations. That includes some of the most popular licenses in the state, such as
cosmetologists and construction contractors. In a testament to their bipartisan appeal, the bills unanimously passed both the House of Delegates and the Senate — quite the achievement in today’s political climate.
To qualify under the new universal license recognition
program, a license holder must be in good standing in their state, operate with a similar scope of practice to Virginia’s version, and not have any major or ongoing disciplinary actions or complaints lingering overhead. Critically, Virginia will also issue licenses to workers if they’ve been practicing for at least three years in a state that doesn’t license the occupation. Only four other states have enacted such an innovative provision.
All told, universal license recognition could directly impact hundreds, if not thousands, of workers. The Department of Professional and Occupational Regulation estimates that the new law will help at least 500 workers a year, while Virginia Labor Secretary Bryan Slater predicts 4,000 workers will ultimately benefit.
Universal license recognition has already borne similar fruit in the 19 other states where it’s been implemented. Arizona, for instance, has granted more than 6,500 licenses to licensees coming from out-of-state since it enacted universal license recognition in 2019.
Recognizing out-of-state licenses is a much-needed reform since Virginia still has some of the most burdensome licensing requirements in the nation. According to a report by our organization, the Institute for Justice, the average license for lower- or middle-income occupations requires 580 days of education and experience — 65% higher than the national average. In fact, Virginia has the country’s third worst licensing laws for those positions.
Those burdens are particularly damaging to Virginians who are trying to take their first steps up the economic ladder. Consider cosmetology. Obtaining a license in cosmetology takes at least 1,500 hours of classes, with beauty school tuition costing more than $17,000 on average. As a result, many aspiring cosmetologists are forced to take out hefty student loans — nearly $7,500 on average, an amount that can easily trigger a debt spiral.
By allowing workers to transfer their credentials across state lines, HB2180/SB1213 lets out-of-state cosmetologists and other professionals bypass those burdens and other red tape. In the next session, lawmakers should build on those reforms and make it easier for residents to become licensed as well.
With more people working remotely due to the pandemic, interstate mobility is more important than ever for states to remain competitive. Thanks to universal license recognition, the Old Dominion can stay on the cutting edge for regulatory reform.